Companies expanding their operations into the Czech Republic (also known as Czechia) open up a wealth of opportunities for expansion throughout the European Union (EU) and even further east. However, challenges come alongside the potential benefits. Payroll management is among those challenges, whether your company is considering moving employees abroad or hiring new staff in-country. Employment laws, payroll regulations and income tax regulations are areas where you cannot afford mistakes. Bradford Jacobs’ Employer of Record (EOR) payroll solutions will navigate around these potential pitfalls effectively and efficiently by putting into action our comprehensive knowledge of tax and payroll regulations.
Running payroll in the Czech Republic demands in-depth knowledge of employment, payroll, and taxation laws – particularly as taxation laws changed in January 2021. Companies must deal with the General Financial Directorate (GFD) of the Czech Financial Administration for personal and corporate tax filing, the Czech Social Services Administration (CSSA) and remitting withheld contributions based on employees’ salaries. Outsourcing Czech payroll will streamline your operations, by dealing with the following:
- Applying to the Ministry of the Interior for an Employee Card, if applicable, for a foreign national planning long-term residence in the Czech Republic.
- Obtaining employees’ Tax Identification Number (TIN).
- Remitting employees’ withheld deductions to the General Financial Directorate and the Social Services Administration.
- Filing returns for the tax year, which runs from January 1 to December 31. Returns are due by April 1 of the next year, May 1 if filed electronically or July 1 if sent by an accountant or solicitor with their power of attorney if registered before April 1.
- Advising on tax payments in advance for employees not taxed at source by their employer.
Additional payroll support includes:
- Negotiating tax incentives for skilled expats.
- Calculating employees’ monthly salary and sending their pay slips.
- Submitting employees’ and employers’ monthly tax returns.
- Creating and submitting your company’s annual accounts and year-end statements.
- Creating payment schedules for salaries and any insurance contributions (if applicable).
- Ensuring annual personal income tax returns are filed for you and your employees, where required.
The above checklist highlights why the vast majority of foreign companies expanding into the Czech Republic’s strictly regulated business environment hand their payroll to EOR providers such as Bradford Jacobs. By outsourcing payroll, your company complies with tax and employment regulations without risking sanctions or financial penalties for late or incomplete filing. You focus on your goals and expansion, free of any concerns over the payroll. Questions? We have the answers.
